A landmark Sector Deal between the government and the automotive industry has today been announced by the Business and Energy Secretary Greg Clark.
The Deal aims to build on the unique strengths of the UK automotive sector, shape the UK’s future of mobility and further develop the strong collaborative partnership established between the government and the industry.
The Sector Deal sets out a joint strategic vision for how both sides can continue to work together and is the first step towards establishing the UK’s leadership in meeting the ‘Future of Mobility’ and ‘Clean Growth Grand Challenges’.
The deal secures joint investment and long-term commitments between the government and the industry in areas including the design and development of connected and autonomous vehicles (CAV), the research and development of battery technology and accelerating the manufacture of ultra-low and zero emission vehicles.
As part of this, the government has announced £26.4m of investment, match-funded by the industry to total £52.8m, to help develop the next-generation of driverless and low-carbon vehicles, with flagship projects led by Ford, GKN and Jaguar Land Rover.
Announcing the deal, Business and Energy Secretary Greg Clark said: “For decades, the UK’s automotive industry has powered our economy forward. Today, automotive firms from around the world choose to set up shop here, citing our history of excellence, skilled workforce and world-leading supply chains.
“In the next 10 years, the sector will see more change than in the previous hundred. From the engines that power our cars, to the way we Fcontrol them and our attitudes to owning them, technology is changing what the industry looks like and where money can be made.
“The automotive sector will shape our response to the Grand Challenges articulated in our Industrial Strategy, such as Clean Growth and the Future of Mobility – transformations which will forever change how people live, work and travel.
“As ever, partnership will be pivotal. As a result of the Sector Deal, both the government and the industry will invest about a quarter of a billion pounds to develop and manufacture electric vehicles, create a world-leading testing environment for Connected and Autonomous Vehicles and invest in a new industry-led programme to raise the competitiveness of UK suppliers to match the best in Europe.”
The Sector Deal brings together a number of long-term joint commitments between the government and the industry that will help build and establish the UK’s leadership in meeting the Future of Mobility and Clean Growth Grand Challenges including:
Low-carbon automotive technologies
- Through the Advanced Propulsion Centre, the government is investing £500m over 10 years to 2023 to research, develop and industrialise new low-carbon automotive technologies in the UK, with the industry providing £500m match funding for collaborative R&D projects
Automotive research and development
- The government is investing up to £225m from 2023 to 2026 to support R&D in the sector, with the industry providing equivalent match funding
Transitioning to ultra-low and zero emission vehicles
- Through the Faraday Battery Challenge, the government is investing £246m to make the UK a world leader in the design, development and manufacture of batteries for the electrification of vehicles.
Connected autonomous vehicle (CAV) technology
- £250m of the government investment to position the UK as a global leader in Connected and Autonomous Vehicles (CAVs) development and deployment. This includes:
- £150m for collaborative R&D projects from which, to date, £100m has been committed to 51 projects, with the industry contributing a further £56m
- £100m for CAV testing infrastructure, £51m of which has so far been committed to 4 infrastructure projects; two ‘controlled’ testing facilities and two ‘live’ public testing facilities.
- The government will be launching a £15m simulation and modelling R&D competition on the 16 January to accelerate the development of connected and autonomous vehicles
Supply chain competitiveness and productivity programme
- £16m of the government funding, subject to business case, for an industry-led match-funded national supplier competitiveness and productivity improvement programme to support a sustainable and internationally competitive UK supply chain for future volume vehicle production.
- The Deal acknowledges that the UK automotive industry has benefited from the European market and as the UK leaves the EU, the industry welcomes the government’s ambition to achieve a new relationship that is free from tariffs and without friction to trade – factors that are fundamental to the competitiveness of the UK automotive sector.
- Through the Deal, the government and the auto sector will work together to seize opportunities to do far more to engage with the wider world beyond Europe where there is untapped emerging innovation and opportunity.
Further proposals are being shaped for the next phase of the Automotive Sector Deal, with a focus on capitalising on the UK’s capabilities including in the digital design and testing space which will substantially reduce the time and cost of developing the next generation of vehicles.